Why senior MNC execs are jumping ships

Why senior MNC execs are jumping ships

Ever since he took the top job at the sleepy Kohlapur-based rural bank to morph it into a major financial institution, in 2010, seasoned professionals from foreign banks are following him to pursue an inclusive growth agenda.

After Rajeev Ahuja, Nitin Chopra and Sunil Gulati, the latest to come on board is Joginder Singh Rana, a Citibanker for 22 years, as the chief operations officer.

Why senior MNC execs are jumping ships

He would join the recent appointees, R Gurumurthy, head of corporate & institutional banking, from Standard Chartered Bank and head of human resources Tajinder Kumar, formerly with Deutsche Bank Singapore.

"I am truly delighted," says Ahuja, MD & CEO of Ratnakar Bank, also a former CEO of Bank of America in India.

A Sunil Mittal or an Anand Mahidra or a Mukesh Ambani is known to inspire senior executives, wooing them away from MNCs to their own transnational conglomerates.

Why senior MNC execs are jumping ships

Mittal recently did exactly that with Gopal Vittal, not once but twice over.

This will be Vittal's second stint at Bharti Airtel, where he served as marketing director for about two years starting 2006, before moving to rejoin Hindustan Unilever's board as executive director of the home and personal care division, the largest division of the Anglo-Dutch major in India.

His portfolio contributes three-fourths of the company's top line. Many, therefore, saw him as an obvious successor to Nitin Paranjpe, who has been the MD & CEO since April 2008.

Why senior MNC execs are jumping ships

Naturally, his decision to return to Bharti to pursue a more entrepreneurial assignment -- he joins from April as a special director (special projects), spearheading international business strategy and to build its data business -- instead of a well-oiled, global process-driven set-up got many nonplussed.

But, Vivek Lall understands that itch perfectly well.

It took just one 'invigorating meeting with Mukesh Ambani', to 'inspire' a reticent Lall to jump ship from Boeing, where he was leading the strategic defence, space and security business to head a Reliance start-up.

Why senior MNC execs are jumping ships

As the president and CEO for new ventures, at Reliance, Lall is fronting Ambani's tryst with homeland security and defence that may even culminate in separate strategic JVs with Dassault Aviation and Siemens.

"The lustre of MNCs has gone. Very few want to be with them forever. Do you hear of GE, Citibank lifers anymore," asks R Suresh, MD of the Mumbai-based executive search firm Stanton Chase.

Most MNCs, says Suresh, have gone back to being either matrix-driven or being controlled from overseas or even by an expat.

Why senior MNC execs are jumping ships

Parallely, the arrival of Indian multinational conglomerates like Essar, Bharti and Birlas, among others, has also led to a considerable sway of talent from MNCs.

These flag bearers of India Inc have grown in scale, size and the complexity of their compensation has also gone up considerably, making them attractive for senior managers like Vittal or Lall.

The coveted MNC jobs or global assignments are not necessarily a pull factor anymore and HR specialists will agree that Indian talent across sectors is increasingly finding an affinity for Indian business houses.

Why senior MNC execs are jumping ships

Unlike the past two rounds, experts say, senior leaders from MNCs now want to join Indian groups that are well established and have transnational businesses, rather than going for small, higher-risk, entrepreneurial projects and promoters.

People have become more cautious after several cases of burning.

"I do see a lot of interest from Indian talent working overseas or in MNCs here to join Indian groups," agrees Sumit Mitra, executive vice-president (corporate HR), Godrej Industries.

Why senior MNC execs are jumping ships

"Godrej has stood the test of time. So, if your anchor is strong and if you can offer a clear vision to these senior cadres, companies like us have a definitive edge."

"In an MNC, a country head or a business head -- if the top job is not available in India or he is maxed out on growth within the India market -- will be given assignments in another geography.

"However, now we are seeing that when there is a choice between leaving the country and leaving the company, professionals may choose to leave the company to stay in the country," added Anjali Bansal, MD, Spencer Stuart India, and a key advisor to top CEOs on executive searches and succession.

Why senior MNC execs are jumping ships

It's important as chances are if you are performing well in India, you will be sent for overseas markets to step up growth.

So, the focus is a lot more on successful Indian managers now.

But, there are several structural handicaps in MNCs as well.

For most C-suite executives, the headquarters is outside India. So, all the impactful roles are elsewhere, and one needs to leave the country to play that larger strategic role or break into the highest boardroom.

Why senior MNC execs are jumping ships

"Then again, for many, staying out of India can also make them irrelevant very quickly in the high-growth Indian context," warns Vibhav Dhawan, partner, Positive Moves, a search firm specialising in emerging markets.

"In comparison, it's a lot easier to become a first citizen of a billion-dollar-plus Indian group," he adds.

"When there is a change in strategy, focus or during a global downturn, can I come back to India and still be relevant?

People are not buying that success in Vietnam and Brazil and it is a sure-shot success formula here.

"And, these insecurities get aggravated in global downturns like now or as MNCs are redrawing business plans far more often," says a former senior manager at a global FMCG company, who is currently back in India and unemployed, on the condition of anonymity.

Why senior MNC execs are jumping ships

"With the Zain acquisition since the summer of 2010, we have a play across 19 countries. Since we have expanded our canvas, our senior managers also deduce that individually. The rub-off will be very positive.

It's a natural collorary. I would say it's the enhanced aspiration of Indian talent to globalise themselves and inculcate a global DNA," points out Inder Walia, group director (human resources), Bharti, who himself headed similar functions in ArcelorMittal for over eight years.

What also helps is that despite its global tentacles, most of these Indian giants deep down retain the soul of start-ups -- nimble, risk-taking, experimental and hands-on.

Why senior MNC execs are jumping ships

Walia and his boss Sunil Mittal have been convincing many that "you are a driver and not a slave of processes", sparking off a kinetic zeal in many like Sunil Colaso, Jayant Khosla and Jay Menon, who are currently manning Zain's Africa operations.

"The president of international business for Godrej Consumer, Shashank Sinha, who has worked in at least two global FMCG giants before, today has direct access to our group chairman.

"Moving away from a regional or category role to an overall P&L responsibility is a huge entrepreneurial challenge. You get complete ownership, whereas in an MNC, empowerment and decision making get slow because of the global structures and hierarchies," adds Mitra.

Why senior MNC execs are jumping ships

MNCs tend to work in bands and structures when it comes to remuneration packages, and stock options often are global versus being local. "But someone sitting in India cannot move the needle on the global stock value.

Some other market/business will have greater control over your potential to create wealth. Compared to that, many of even the promoter-led Indian conglomerates offer flexibility and leeway in compensation structures.

In many cases, a CEO's wealth creation opportunity is linked with the growth of his business," says Bansal. Several of the Indian retail sector CEOs, for example, are believed to have been offered such structures.

Why senior MNC execs are jumping ships

No other MNC faces as much scrutiny as HUL does, every time a senior executive leaves. And, in the recent past, there have been a few.

Eight months before Vittal, Shrijeet Mishra, executive director (foods) had resigned, after being with the company for nearly 25 years.

Rakshit Hargave, who was heading subsidiary Lakme Lever, and N Rajaram, who was vice-president (hair care) are some other examples.

HUL officials claim, the organisation has over 1,500 managers working across functions and the attrition rate is significantly below the industry level, at 5 per cent per annum for the last four years.